Rupee Plunges 25 Paise Amid Rising Oil Prices and Dollar Demand
The Indian rupee depreciated by 25 paise to 95.33 against the US dollar in early trade on Thursday, September 11, due to rising Brent crude prices and persistent dollar demand.
Elevated crude oil prices have increased concerns over India's import bill, with every $10 rise in oil potentially adding $12-15 billion to the annual import bill. This has put further pressure on the current account and the rupee.
Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors LLP, noted that the rupee's move beyond 95 was psychologically significant and triggered additional dollar demand and stop-loss activity. However, RBI intervention contained the decline.
Amit Pabari, MD at CR Forex Advisors, warned that sustained high oil prices could weigh heavily on the currency, especially since FCNR-related flows are no longer available to offset this pressure.